Ubuntu 12.10 install and boot issues. Please HELP!

Ok, for about the past 2 months, ive been trying to install Ubuntu on my awesome acer aspire one netbook.

Inter Atom 1.6GHz
1GB RAM

I have tried multiple installation methods, Linux live CD, Linux live USB, windows installer etc. All have the same result

The installation hangs at "CPU interrupts balancing daemon"

and same when booting. I can access GRUB fine but i really am not very experienced with Linux (hence the reason im installing it). This is booted next to windows 7, and i have setup a separate partition of around 40GB for the Ubuntu installation.

I suggest that you try 12.04 instead of 12.10 as there seems to be an issue like you describe with 12.10.
A quick google for "CPU interrupts balancing daemon ubuntu" should help you find the fix if you decide to stick with 12.10.
first result HERE talks about it.

Yes Arch is definitely easy to use. Also the older Ubunt variants are not bad because normaly you dont need the newest version of something if it runs for you.

Gentoo is very good for learning the basics of linux because you start in text mode and optimise your linux to your pc hardware this will give it more speed but i would not recommend that on a 1.6 Ghz because the compiling needs a lot of time. If you want to try go with simple Guis like XFCE and not KDE or Gnome they have a hard time running on a 1.6 anyway.